Since Boston Scientific (BSX) announced on April 15 it would return to selling implantable cardioverter defibrillators (ICD) following a month-long halt, the company’s stock has gone nowhere, but it has managed to hurt competitor St. Jude Medical (STJ), which investors expected to benefit from BSX’s fumble.
Boston shares are down 6.4% since April 15, while St. Jude is off over 9%.
In a note to clients today, Credit Suisse analyst Kristen Stewart writes that the company could still see improver performance “over the next quarter or two” riding off Boston’s stumble, with physicians at a recent conference expressing “significant” interest in St. Jude’s defibrillators. Stewart sees 10% to 15% upside for the stock.
Still, she has a “Neutral” on the stock because the so-called “cardiac rhythm management market, of which defibrillators are a part, is a “slow-growing one,” and STJ gets 60% of its sales from that market. Also, Europe is 26% of STJ sales, so a weaker Euro goes straight to the bottom line as the company does no hedging.
St. Jude shares today are off 21 cents, or half a percent, at $38.38.
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